Exit Centurion@$0.54...

My last blog I mentioned I've entered Centurion which I have recently sold off, but at 1 bid higher than my cost price. Due to the amount I put in (which indicates the confidence I had but did not pan out as I wish); I made a small profit of around $200 (mind you, my brokerage earns more than me, buy & sell cost close to $500)...

Still my indicators showed slowing momentum, & price did not move higher (until I sold, common phenomenon hor?), but price did not close higher than my exit price. Thus may be wise to exit also... Coming quarter results will interests me alot, I will want to see how much the finance charge affects coming results & also how its new investments will contribute to its top line...

Let's see if there would be a Santa Claus rally & January effect this year...
Happy trading everyone, most likely my next blog will be in 2015 when I do my bi-monthly & yearly review together...

May the trend be with you...

2014 September-October Review

2014 September-October Review

I've escaped the stock markets rout between mid-September to mid-October and entered 2 trades slightly late in the last 2 weeks. One was Global Yellow Pages which I closed today when the counter shot up 10% for no reasons (SGX queried, company replied not aware of any developments, thus really no reasons!). The other is Centurion which I am still holding, both entered partly due to technicals & mostly due to the insiders trade.

Centurion recent announcements [details please check SGX]

 Global Yellow Pages recent announcements [details please check SGX]

For Global Yellow Pages, a long white candle (today's 3/11/14 price movement) tends to be more bullish, as buying momentum may increase; still I am a "messed up" investor with trader person. My fundamentals angel is screaming at me to take profit, especially the price now exceeding the "conservative" NAV which I derives by removing intangible assets of $51 million out of $168 million of total assets, which is about 1/3, bearing in mind the company is still losing money in past quarter. Thus its 7.71cent as of 3 Sept 14, Q1FY2015 report is really worth 5.1 cent (2/3 x 7.71cent).

While its still higher than 4.8cent the closing price today, I am not a greedy person; I rather run now then to wait for it to fall. Unless there is a takeover, which may sparks more interests; but fundamentally I think its time to take profit. I might have left some money on the table, but well... "treats or tricks!"

Closing out of Sembcorp Marine ~ Cut loss

An interim update here, as my last post shared on my analysis & trade in Sembcorp Marine.
Unfortunately, oil price continued to fall, the price hit my cut loss trigger & I took the bite & closed out my position.

Not every trades are going to be profitable, the loss was $1000+ after offsetting the $750 dividend I collected. Still it is important to learn from each trade, and key to longer term trading & thriving is to let the winnings run (until it hit your targets/turning) and control your losses (dont overstay in a trade, follow your plans!)

My closing analysis on Sembcorp Marine...

2014 July-August Review ~ & ~ Sneak peak into my current trade (which did not go the way I like)

2014 July-August Review

Did 3 trades between Jul-Aug 14, with good luck, hopefully my last trade SembCorp Marine could turn out profit soon. So far, my profit to loss ratio is about 2:1 for every 3 trades. Somehow trades that I put in writing on my analysis tends to do better, which reminds me of the importance of having a detailed trading plans and reminding myself why I am in the trade in the first place.

My trading capital is roughly $50-60k and I prefer to "one shot one kill" instead of spreading it (I'm not a believer in diversification). Also, trade amount of $50K+ attracts 0.22% commission instead of the usual 0.28%; of course there are drawbacks such as higher stress (but greater focus, only 1 chart to follow), all eggs in a nest (definitely not to be used in penny stocks, any stock halt will result in all the capital vanish & gone)... Year to date, I am managed a rough 10% profit, which hopefully could improve with experiences.

SembCorp Marine
Trading Plan first written on Tue, 12 Aug 14, and finally entered on Thu, 14 Aug 14 (5c dividend ex-date on 15 Aug 14).

Let's take a look at the chart now.

Daily wise, it breaks below the support trend (due to ex-div of 5c), the support trend has now become a resistance waiting to be broken. Various indicators have shown rebound & bullish signals, but the price is struggling its climb upward.
One notable observation was the price seem to move strongly in the morning, but often lose the strength & closed lower (sometimes becoming a drop).

Weekly wise, price is near its previous 2012 breakup point, a strong support ($3.89) which it did not touch.
My initial hope was to grab 1-2% within the week, but now it has drag to 2 weeks, hopefully it could hit my targets within Sept 14, if have to, this could turn into a longer term play with a few catalysts in 2015.

At times of uncertainty, such as my SembCorp Marine, I would re-look my initial trading plan why I have gotten into it. The near term Technical analysis did not pan out the way I like, but the indicators still ticks.

And if I have to hold much longer, at least there's a few catalysts I can look forward to and how some of the current "negative variables" should be negated.

1) Anaylsts' negative views; weakening margins, growing competitions
While I agree partly (but prospect-wise I beg to differ), firstly, the Brazil shipyard has commenced initial operation in 2H14 & will reach full operation in 2015; thus completion rate will increase & also the lower cost of labour in Brazil (as compared to Singapore) should help in cost savings.

2) Poor market sentiments
When I entered the trade, the sentiments were poor, with Ebola outbreak, Ukarine tension, Israel-Hamas fighting, oil price drop to US$100; now, things just worsens, Ebola continued to spread in Africa, Ukarine lose ground to Russian-backed forces, Oil price at US$95...
Apart from the sentiments, the only direct variable is oil price, which I've noted rigs orders will continue to grow as long as oil price stay above US$90. I found a 2013 investing article where it was praising oil rigs as "bright investing spots" saying the sector will grow as long as oil stays above "break-even" range of US$70-80;and that was only less than 2 years ago.
Other articles such as http://www.forbes.com/sites/jessecolombo/2014/08/31/why-the-energy-markets-may-be-at-a-turning-point/ where Jesse Colombo observed a turning point for US Oil's fall.
Together with the seasonal winter seasons coming, the oil price should return to US$100 soon.

So much were written, guess I should stop now...
To end, much thoughts have been made for each trade, after all its our hard-earned money at stakes...
May the trend be with us...

2014 May-June Review ~ Macro, STI Beware! Signs of another potential downturn

2014 May-June Review

I seem to have good runs with Mapletree GCC in the past 2 months, but things did not turn out the way I thought. For example my last trade, right after I entered, the counter became range bound for almost 1 month before it continued its uptrend.

I have no positions left, and is monitoring for any signs of bearish pull back or downtrend.

Macro

Macro wise, Fed indicated QE3 should end on Oct 14, thus economists estimate official Fed interest rate will rise in mid 2015 instead of initial end 2015. I expect this to have a sooner than expected impact on stock markets and real estate markets soon. And seriously I am hoping for it to come, afterall real money are made when you enter during market lows, and market highs simply help you to realize the profit; in between traders hope to profit from the "waves".

STI Beware! Signs of another potential downturn

Its been some times since the 3EMAs I use merge together, this tends to mark a potential change of trend. The last peak is also lower than the previous peaks during June 14, stochastics signal a pull back, thus I will steer clear from the market for now. 

May the trend be with you...

2014 Mar-Apr Review ~ Trade Records

The past 2 months, trades have not been as smooth as I want them to be.

I realised I have exited too soon for some of the trades, for others I have broken my rules & lost $1,700 as a result which set my year profit target considerably.

I also found out I seen to be chasing negligible profit and garnered only 1% return from most trades. I cant seem to hold on to a trade, for fear of it turning (some did turn, others went further & I left considerable money on the table).

Trading has becoming a exciting game for me, almost intoxicating like heroin...

Still I hope I could trade with a clear plan & not forget the plan entirely once I'm in the trade...

STI facing resistance

The last purple oval shaded area, was the area I attempted to short by holding STI Put warrant overnight, and as one could see, the STI gapped up resulting in the $1.7K loss. I was stubborn in my bearish view & only reacted the following day. Had I hold for another day, it would have been worse.

Still one could see that STI failed to break its resistance (around 3275), its not easy to time the market but I think I will stick to the bear side though this time I will wait out the coming fall. Its almost painful not able to trade the coming fall, but the existing instruments to short STI (Put warrants, CFD) are all leveraged with holding costs & I am kinda slow "like a turtle". Thus buy & hold even if fail, at least I could wait out abit & decide what to do.

I shall end here, could feel abit aimless and moody today.
Hope it does not affect you... I am still optimistic to achieve a 10% return this year.

May the trend be with you :)

STI Bear Appearing? Triple EMAs crossing down, price close below EMAs

STI Bear Appearing? Triple EMAs crossing down, price close below EMAs

Fed Janet Yellen, the supposed "Dove" Chief has become "Hawk" on her 1st chaired meeting, giving guidance on expected period when rates will start rising and so on. This has driven most currencies to trade lower against US$, and monies leaving for US$...

On the chart front, many indices have fallen, & STI seem to have entered a renewed downtrend.

I used short term EMAs with 7, 13 & 26 days, and all are set to cross tomorrow (21/3/14), all it need was for STI to close the same or lower. Trading is never easy, as some of you may noticed that just 4 days ago, 14/3/14 when the STI opened below the EMAs but closed up, and almost seem like a fake breakdown but has since come back down with a breakdown signal again.

And I hate to trade on Fri, 21/3/14 as you never know what is going to happen over the weekend, but it looks premature if one is to close the trade intra-day leaving profit on the table. Just look at the previous down cycle, 24/1/14 STI open & closed below EMAs, then 27/1/14 opened with a gap down at 3038, if one is daring enough to use Put Warrants or leveraged instruments such as CFD, it would have been a 10% immediate gain over 2 days period.

May the trend be with you...

1st foray investing overseas... huh? MICEX, DBXT MSRussia10US$ (J0R)?

DBXT MSRussia10US$ (J0R)

Now that Crimea has joined Russia Federation, is the standoff over? If situation can only become better from now, then should we start considering investing in Russia Stock Market Index, the MICEX?

Now do not get me wrong, I am not giving a recommendation here. It is already risky enough to trade stocks, and it could be worse trying to invest in a foreign country’s stock index but its possible through DBXT MSRussia10US$ (J0R) listed on SGX.

2 additional risks here to bear in mind, one foreign risk; the foreign law, the foreign culture, every thing that is foreign is risky simply because you are less familiar with it. At least you are more familiar with SG regulations as you are staying here, but foreign country...

Second risk, currency exchange. You may get the price right, it may rise, but if its currency depreciate against SG$... worse, assuming the ETF purchase MICEX top 25 stocks in Russian rubles, then sell the fund in US$, but you bought via SGX with SG$, so its altogether 3 ways exchange.

Fortunately, both the Ruble currency and the MICEX stock index have fallen since the Ukarine-Crimea crisis started, if the worse is over; or perhaps over the slightly long term say 1 year later, perhaps Putin & the rest of the world will forget & be merry again? Think about past Argentina crisis… there’s so many crisis even Russia once defaulted its bonds, but it all seem so distant when it was only last century and we are only 14 years into 21^st century J

My point is, MICEX has fallen, Ruble has fallen, but has all its great businesses there affected? Are they exporting less goods, less natural gas? Or will all this be temporary? If this are all temporary, is there an opportunity lies within this crisis?

All will this be an once in a lifetime opportunity? How often do you see Russian MICEX index selling at PE ratio of only 5.32? Hack, the earnings will return my capital after less than 6 years... Just saying :)

Update on Trades
As a result of this MICEX opportunity, I decided to close SATS and divert monies to DBXT MSRussia10US$ (J0R). This is a mid-term trade which I hope to exit once situation normalise, and price go back to its normal range of 1440-1500.
I am still holding on to Popular, looks like its still sleepy, lets wait a little for its Dividend 1 cent in Sept 14...

SATS Company Buyback & Sleepy Popular maybe awaking

SATS has launched series of company buyback of its shares.

The last it did was between 11 Nov 13 - 19 Dec 13, spent est.$8.509 million buying back at between $3.07-3.30. Price seem to have risen back until recently it fell again to as low as $2.93, a 2 years low.
Then it started buying back again, and has spent $9.339 million buying back till yesterday, there was also some large transactions today, it maybe buying back still.

While most companies buyback shares to reward its existing sharesholders, by reducing the number of outstanding shares, since dividends are not paid to Treasury shares it bought back.
Furthermore SATS seemed to only do so, when price seem to oversold. Its dividend of 10cent in Aug 14 & 5cent in Nov 13, if continues will equate to 4.95% (at $3.03 last close).

Adapted recent buyback history from Shareinvestor.com, its a neat data to decipher corporate actions :)

Sleepy Popular maybe awaking
Popular has languished for sometimes & drop to as low as $0.22, it stayed there for sometimes until recently there is a force index spikeup signalling a potential rebound or breakup. On a side note, its extremely to buy at $0.22 now, I did a trade today at $0.225 (& waited quite some times to get), a potential entry price would be $0.225-0.23, with a stop loss at $0.215, targets would be $0.25.
Fundamentally, Popular should be announcing its quarterly result soon, do note that Q1 & Q3 are seasonally stronger earnings period. Lastly its dividend in Sept 13 of 1cent, if continues would equate to 4.58% yield (at $0.225).
Rolling PE: 8.84
NAV: $0.2668, Price/NAV: 0.82 (aka 18% margin of safety).

2014 Jan-Feb Review ~ Trade Records, experimenting with programming trades & why every trade rules failed 100%, my next phase of trading...

As previously promised, I shall reveal my trades; and even better, let you into my "trading room" by showcasing a trade along with my thought process on how was it done.

My experimenting with Chartnexus XpertTrader backtesting, programming

Before I show my trade records, I like to update on my recent experimenting with programming trading rules, backtesting them and so on. One common dilemma faced by traders is whether to follow the rules or not; otherwise known as discretionary trading and programmed trading.

Discretionary trading refers mainly to trading by individuals, whom may decide whether to stay on a trade, or exit, entirely upto their discretion. Some may have certain trading rules, some may change their rules, some may ignore & trade entirely with their gut feeling. This camp, typically may look back & see some profit left on table, or suffered certain higher losses so on, and one possible fault they may blame themselves is that they should have followed this rule or that. How nice was it, if one could simply programme the trading strategies or rules into a computer, and let it trade on behalf, afterall our emotions cloud our judgements… right? Wrong!!

Now comes the programmed trading, in programmed trading basically you programmed a series of trading rules into a computer and the computer will execute the trade based on the rules. Sound good? It’s a disaster!

I tried 10+ trading rules, from famous Impulse systems, moving averages, MACD, RSI, parabolic SAR, mixture of trend following tools & oscillators and so on. Well not much time, about 4 hours of tweaking & back testing… the result? Every programmed trading rules failed over the long run of 1 year. Every one ended lesser than the initial capital, most of them lost more than 90% of it.

Perhaps I haven’t back test them enough, perhaps I should only back test them on a handful of stocks and not the entire SGX stocks (exclude) warrants, but even with money management rules say exit when loss exceeds 2%, profits exceeds 25%, setting a period of gaps before executing another trade and so on. The results are the same. If trading rules that we read from famous authors, popular gurus, do not work, then what for are we still trading? How come there are still so many people who made it with their trading strategies when programmed trading’s backtesting results showed that everyone of them failed over the long run of only 1 year.

I believed the problem is simply programmed trading is dead, they are not human, without humans’ greed & fear, and thus programmed trading are unable to react to changing circumstances. For example, when a trading rule did work, and your trade accumulated a paper gain of say 25%, but over the next few days, something was wrong, the price gap down, or started spiralling up and down in a roller coaster ride or whatever it is, fear will come in to want to protect the remaining profit before it evaporates away. But programmed trading is based on the formula, if your exit rule is not triggered, the trade will simply ride all the way down until it become a loss.

Another common trading error I faced, which I am experimenting to adapt it, is supposed you programme a trade to be execute when say moving averages are crossed and both trending up. Well a human being would be able to see from the chart that, perhaps its increasing with momentum and hold on, but bang! Some news came, and the price fell on the day, then the next day the price open higher and seem to resume, a human may wish to hold on and wait, but the programmed computer would exit the trade based on the rule that the moving average decreased the day before, and thus exited without a profit or more likely a small loss due to fees. And with time to come, the stupid programmed computer will keep repeating stupid trades, following rules blindly at every precise 0.1 change, resulting in many trades but little profit or many small losses.

Then you might asked, we already have a computer chess master which beat the world chess master; soon we will have a supercomputer that will beat the world wealthiest guru like Warren Buffett or George Soros… Chess could be programmed within say 100,000 of chess parameters; after all there are only 20+ chesses, 100+ boxes to move around, but what about market participants? What about booms and crisis? What about buyouts? Can human behaviours be calculated and thus predicted to be traded on, and profit? Maybe, but not yet. Until that day arrives, and robots probably replace human, then traders could retire to graveyards… I would only use trading rules as guide, chart patterns for analysis, but I myself, the sole decision maker; master of my own trades…

2014 Jan-Feb Review ~ Trade Records
As usual, there were stupid trades that I should have hold on such as Keppel REIT where I exited right at the recent lowest, and the next day, price begin to recover. Today its already close to my cost (price $1.175, cost $1.18).
Also, most warrants trade were exited at 1 bid difference, this is due to fear as a intra-day fluctuation is rather limited, and reversal is common intra-day.

“Come into my trading room”, sample of my trade
As you can read from my trading comments in the picture, its not easy to trade in warrants, as its rather fast & furious and at the same times slow & frustrating.

By fast & furious, I meant if the price move against you, your warrant price will collapse like hell, and you suffer easily 10% loss or more.

By slow & frustrating, if you get in with a call warrant in an intra-day uptrend, you may be right, but the STI is fluctuating up and down like crazy, when its over MAs are up, but the average price moves slowly until finally hours later, if finally move high enough for the market maker to move its bid. Some warrants move by 5 points, some 10 points (by 5, meaning say STI move 3000 to 3005).

Thus its important to familiarize with the derivative instrument one is using, and if price move against you, the risk tends to be triple to the potential rewards, as it shown on 20 Feb 14, when I exited at 1bid loss. The combined fee & loss takes me 2-3 successful trades to recover.

My next phase of trading...
There is a potential bear coming, I am watching it. As the saying goes, bull go up in steps, bear jump down the window. My next challenge is to catch a bear & slide down with a put warrant over several days.
It should be note that it is extremely dangerous to hold warrants for too long, as warrant generally expire worthless on its expiry date.

I am eager to earn trading profits to accumulate for my longer term goals such as buying a house, rent it, be a landlord etc. It will be hard and long journey, but saving at 0.2% pa interest can never get there, thus I must be good at investing. Most average traders suffer losses, I was one of them; my hope is that I would become a professional good trader and make consistently good profits to compliment my job income and realize my dreams.

I now allocate my capital between intra-day trading ($10K) and mid-term investing ($50K, 1 week+).
Thus I only follow 2-3 positions at any one time, hope I would remember my trading plans & stick to my cut loss rules (2-5%) and realize my dream.

Look out for next post...

STI hitting its downtrend resistance soon

Just a quick post here. Hope most of you have escape the last downtrend & even better enjoyed the recent recovery of STI...


Next week I will be posting my trade records for 1st 2 months of 2014, moving forward I intend to post a bi-monthly trade record review... Some may be surprised that I have traded more often this year, & perhaps even shocked that I have gotten back into warrants despite my failed attempts previously...


More will be revealed...


Now, a quick caution for upcoming STI's movement.


As usual, should STI break above its downtrend resistance (around 3120-3140), STI would then have entered into a new uptrend. How long, we shall see... My gut feeling is that it will touch & exceed previous peak 3190 (I reserve my rights to change, should indicators show otherwise, in coming days).

However, if STI failed to break above, look out for sideways fluctuation or more likely a reversal & thus another downturn ride.

~ All the best & may the trend be with you ;)